My name is Mark Strouse. This is the ninth annual JP Morgan Energy, Power, and Renewables Conference. This next session is with Centrus. This is a stock that we do not cover, but, you know, covers a lot of interesting things to talk about within, kind of the nuclear space. So looking forward to this. Amir, CEO, Amir Vexler, thank you very much for joining. Kevin Harrill, thank you very much. Let's dive in here. So for the uninitiated, can you just kind of discuss the current state of the global and U.S. nuclear industry, and kind of how that's evolved over the past, you know, you name it, one, three, five, 10 years, and kind of what are the near- and long-term expectations for this market? Yes, hi. Good afternoon, everybody. For those of you who have not been following the nuclear industry that closely, actually about 13 years ago or so, there's been a watershed event in the industry, the Fukushima disaster. It seems like everything has changed in 2011, March of 2011, when that happened. Plants were shutting down. Japan effectively shut down all of their plants. Some countries bowed out of the program completely, like Germany. There's been a lot of changes, and Centrus is in the fuel cycle, part of the business. Obviously, when plants shut down, that affects the fuel cycle as well. That affects the all the suppliers and the input into the fuel. So 2011 has been a pretty harsh year. Things have really plummeted for everybody. There's been steady increases and getting back to what normalcy used to be. I would think that the next watershed event that had occurred was actually occurred around the time that Russia invaded Ukraine, where a lot of countries realized, number one, that you got to have, you know, energy independence. And it could come and usually comes in the form of nuclear, which is a great way to earn energy independence. And so, and secondly, the Russians have been a very dominant supplier to the Western market of anything that involves nuclear fuel, particularly enrichment. Together with the sanctioning of the Russians and with the realization that countries and companies want to be energy independent, we have seen a steady increase in the sentiment towards Europe and the increase and the investment in the fuel cycle industry. Not to mention the fact that all along, everybody's beating the drums on carbon-free energy sources. And finally, the realization that nuclear is it, and there really isn't a solution that's carbon-free without nuclear baseload nuclear generation. Right. Okay. So more specific to Centrus then, can you just kind of, again, assuming some are less initiated, kind of where you fit within the nuclear value chain? Yeah. So for those of you who are not really that familiar with the fuel cycle, in the nuclear industry, almost all the reactors in the world operate on enriched uranium. So first you got to mine the uranium. And there's many uraniums around the world, many countries. The big producers are Kazakhstan, Canada. After the uranium is milled, it's converted into yellowcake. Then it's converted into a gas. The reason why it's converted into a gas is because that's the form that it needs to be in order for it to be enriched. And after it's converted into a gas, it is enriched, which basically concentrates the active element that causes fission, the U-235. And that's the line of business that we're in. This is the most restrictive and constrained part of the fuel cycle, just because of the technology that enables to do that. It has proliferation implications. All the people that do the enrichment are, at the present time, with the exception of Centrus, all state-owned. So Russia, China, France, and the European Consortium. After the uranium is enriched, it's then deconverted and fabricated into fuel rods and put into the reactor. That is, in a nutshell, the fuel cycle. We're sort of right in the middle of it. We're in the area that's in the box that's most constricted, especially now with the Russian dominance sort of coming to an end in the Western world. Okay. So you touched on this a bit, but maybe just kind of going into that, comparing and contrasting to the state-owned competitors, I mean, is that really kind of the core differentiation? Is there anything else that you would call out? Well, we have several differentiators. So, I mean, we're proudly publicly traded. And, you know, I think that's an important thing that we would like folks to understand that if anybody wants to invest in any type of enrichment, really the only company that anybody can invest is Centrus. And I think that that's, to us, is a big deal. But even outside of that, the things that I would point to as differentiators, we have a licensed facility in Piketon, Ohio, that is producing HALEU, which is a higher form of enrichment of fuel that's required by advanced reactors. So we're currently enriching under a DOE contract, HALEU in a licensed facility, the only licensed facility in the Western world to enrich HALEU, and only one of two enrichment facilities that are licensed in the U.S. and we are the only U.S. technology out there for enrichment that is operating right now. So these are the differentiators. Got it. Okay. So you've got two segments. Again, just assuming less familiar, can you kind of just kind of break down the two segments, the LEU and the CTS, kind of what the the business model is for both of those? We got our able CFO in here, and I don't want him getting bored. I'll pass the question on to him. Thank you, Amir. When you look at our two segments that you mentioned, the CTS segment makes up about 16% of our revenues, and the LEU segment makes up about 84% of our revenues. The CTS segment is what Amir mentioned. It's where we're actually starting the process of producing HALEU, which we've already succeeded back in October and have achieved 135 kilograms as of our latest quarterly earnings. This is also the segment where we had our legacy LEU production in the last decade, in 2012 through 2016. When you look at our LEU segment, this is the segment in which we are serving as a broker between our suppliers, which are primarily Russia and the French, for through the Orano company and our bridge with our utilities, both domestically and abroad. So we are very excited with both of our segments. We believe the LEU segment is highly de-risked, produces reasonable cash flows on an annual basis, and has a line of sight through 2030. And the HALEU segment is something that we've been developing, but we'll need a public-private partnership to expand our business, in both LEU, HALEU, as well as national security. Can everybody hear okay? Yeah. Okay. All right. All right. So the CTS business, you said 16-ish% today. I think that's the fastest growing portion of your business, though. Kind of over the next several years, maybe, can you talk about what that, kind of the mix of the business looks like and what's really driving that? Why is that kind of the more appealing part of your growth story? Yeah. Yeah. And I'll address this one. It's more appealing because of the fact that in fact, it's more of a growth-type business. When you look at the LEU side, which is a broker-trading business, we primarily are going to be serving as a broker-trader through the better part of this decade. But we're working to develop in-house capabilities across the lines that I just mentioned to you from a market perspective, both commercial, which is LEU, advanced reactors, which is HALEU, and then, of course, national security. So we believe from a total addressable market perspective, we have the ability to compete for the better part of $10 billion by 2035 in all three of these areas. Billion. Yes. A billion or a million? Billion, with a B. So we would expect, you know, when you're talking about the mix of revenue, for these businesses to see a higher growth rate on the CTS side versus the LEU side in the next five years. So it would presumably flip as we build out our own in-house capabilities. Got it. Okay. On the LEU segment, you've got long-term supply and offtake agreements. I think it's about $1 billion or so in backlog. Can you talk about how those contracts work? What's kind of the average tenor? Do the contracts have pricing escalators? Yeah, I've got a few more other questions. We'll start with that. Let me field that. Yeah, I'll field that. So from and I'll break it out between customers and suppliers. Okay. So, we currently, with our existing broker-trader business, have about $1 billion in backlog. I will make a note that we have about $900 million of conditional LOIs that go from 2028 to 2040. And this is mainly focused on our in-house capabilities and building that out. And that's why the length of those contracts are more at the end of this decade going into the next decade. With the existing $1 billion, I'll go back to our legacy broker-trading business. That is primarily domestic companies, but we do have an international foothold as well. And maybe I'll just break it down by, you know, what we're actually selling to our utilities across the globe. So when you look at the LEU business, there's two components to LEU. There's the SWU component, which is separative work units, which is, in effect, the work and service that is done in order to enrich the uranium from its natural form up to LEU. And then there's the natural uranium, which is the feedstock, as I mentioned, that is needed in order to do the enrichment. So we contract directly with our suppliers, and we deliver that uranium to our utilities. And the utilities pay us, in the form of the SWU to do the enrichment. And they provide the actual uranium to the supplier, which is the special ingredient in order to actually make the low-enriched uranium. And so when you look at the contract duration, and this is, you know, prototypical with regards to the legacy fleet, they're typically looking 18-24 months out. So we have varying levels of engagements and contract lengths with our customers. But our existing contracts go out through 2030. And so when you look at our supply base, I'll maybe pivot over to the suppliers. We have two main suppliers. We have the Russian supplier, which is Tenex, and the French supplier, which is Orano. We've established contracts with the Russian and French through 2028 and 2030, respectively. And when you look at those contracts, they've been very favorable to us as we entered into a market reset for the Russians back in 2018. And we engaged in the Orano contract back in 2019. Both contracts have hybrid pricing with a market component. But ultimately, as we've seen, when we signed these contracts, they were at historically low rates. So we've been benefiting from that low cost. And it's been helpful with regards to us selling contracts into the market when you look at where SWU prices are today, which is upwards of $180. Okay. Next-gen nuclear. Can you kind of discuss the opportunity for Centrus with the advanced nuclear development? Just kind of talk about how the kind of the broader market opportunity, what geographies will be a focus for you? Yeah. So next-gen reactors, I don't know how much of you guys are been following or familiar with this. The advanced reactors require a higher level of enrichment that I earlier called HALEU. As I mentioned, we're the only ones that have a licensed facility and actually enriching up to that level now. We have a few MOUs in place with some of the large developers, that some of them are part of the Advanced Reactor Demonstration Program. Some of them are not. But basically, we are positioning to be the supplier of the fuel for these advanced reactors. In addition to this, the fact that we're able to demonstrate that we can enrich up to 20%, by default, we're able to enrich up to 5%, which is the fuel that is accepted all over the world right now. So if we talk about opportunities and what doors are open to us, I really view that as three doors that are open to us that we are strategizing how to approach the production too. One is the HALEU advanced reactor, which we already do. Second one is the LEU. And we are in discussions with utility partners about offtake. In fact, we've announced almost $1 billion worth of contingent contracts in offtake with some of these customers. And that helps us enter the LEU market. And the third one is around national security. Since ours is a dual-use technology, which means it's a technology that could be used both for defense purposes and for civilian purposes, we are positioning ourselves for national security enrichment as well. For those of you who are not familiar with what national security enrichment entails, this is a lot of it is naval reactor fuels, so submarines and aircraft carriers. We as a country have not been enriching for about 30-some years to those levels that are required. There will come a time soon where those would need to be refueled. So the big picture, and just to add to what Kevin is saying, if you really believe that nuclear is going to grow, and if you believe that, whether it's the United States, Europe, Africa, South America, regardless of where the growth is going to come, fuel has to be provided. Fuel has to be enriched. From our perspective, whether it's advanced reactors, conventional reactors, whether it's reactors in the U.S., Europe, or anywhere in the world, at the end of the day, those reactors will require enriching. There is a finite number of enrichers in the world. I don't see that number growing for many, many years just because of almost insurmountable barriers to entry into the world of enrichment. We're kind of uniquely positioned in that if the growth happens, regardless of technology, regardless of region, we're somewhat agnostic to it. We know that that will provide the right amount of pressure onto the supply chain, which we require, which we're a part of. So you mentioned that advanced reactors require the higher enrichment, and you're the only provider of that. Can you talk about the response that you've seen from competitors, though? I mean, do they have plans to ramp up over time, or what does that look like? Yeah. I do believe that we are the first ones. I think we have the first-mover advantage, obviously, from a timing perspective and what we're able to do. I do believe, though, that just to be fair to the competition, if the market matures, whenever that matures, and there's enough advanced reactors, I think that the competition would undoubtedly enter the market as well. I mean, it's not technologically, it's not a big leap for them to do that. It's a matter of licensing it, which takes some time and building out a facility. But, again, we have the time advantage here. Mm-hmm. And I think you've got some agreements with some SMR developers. My understanding is they're like MOU-type. Kind of talk about those. I mean, what exactly is kind of the understanding within the MOU? And what's the timing of when that could convert to revenue, orders in revenue? So I'll talk maybe about two specifically that we have publicized and announced. One is with TerraPower. You know, TerraPower requires a form of HALEU that's metalized. This form of fuel really doesn't exist right now or being utilized anywhere right now. So we signed an MOU to be their sort of fuel provider. Now, this is not a contract, but a memorandum of understanding. And we are going to be working towards finalizing a contract when their ability to commit to that fuel solidifies. So it is my expectation, and I'm envisioning that we will move towards a contract as soon as their business model becomes a bit more of a reality. The other one that we signed an MOU with is Oklo, which has a very unique and interesting business model. You know, they will operate their reactors. The agreement that we have with them is somewhat reciprocal, where the reactor is going to provide power to our facility, and we will develop and supply the fuel to the reactor. So, again, these are MOUs. These are things. There's other things in the pipeline that we're working on. But this is sort of an example of how some of these relationships tend to evolve as the reactor developers mature and license and start getting into commercial agreements. Okay. Can you touch on your manufacturing capacity within the CTS segment? I don't know what the appropriate way of if that's measured in weights or in kind of megawatts. What's the capacity today? What's kind of the time frame of ramping that up? And maybe talk about kind of maybe some of the CapEx requirements in order to get there. Yeah. So right now, we are enriching under phase two of the DOE contract that we have. It's a one cascade that is designed to produce about 900 kg per year. So far, as Kevin said, we've announced we've produced upwards of 140 kg or so. So these are sort of the numbers we're talking now. Obviously, as reactor developers have more certainty in what they do and they start placing orders, the expansion, there's plenty of room to expand. In fact, we have a facility that could accommodate about 3.5 million SWU or so, which is a significant amount. I mean, it's a facility the size of a Pentagon. So, we have a great infrastructure that are able to support that. And we're able to expand when we start getting firm commitments. In my mind, again, I'll switch back to the fact that advanced reactors or regular reactors, we're able to make that enrichment. I hope I answered the question. Yeah, yeah, yeah. Any questions? Shaki. Do you mind waiting for the mic? Sorry. Thank you, sir. Thank you. Maybe I missed it. Can you explain the difference between the advanced and the normal reactors? How, in what way, is an advanced reactor any better, any different? Why is it advanced? Yeah. Why is the moniker of advanced attached to it? So there's several generations of reactors. The reactors that operate now belong to a certain generation. All of the reactors that are putting power on the grid, somehow, many years ago, it was decided that we will use reactors that use water as a coolant. It has positives and negatives associated with it. And that's sort of the genealogy of all the reactors. People have gone back to the drawing board and said, well, why do we need to use water as a coolant? We could use other exotic materials that have benefits in terms of reliability, in terms of in case of an accident, God forbid, they could be safer. They could have a lot greater efficiency of conducting power. So the advanced reactor part refers actually to that there is this exotic permutations of what coolant and designs of these reactors. And they typically tend to be smaller in size, more compact. And the reason why they're more compact basically requires a higher power density from the fuel. That's why the fuel has to be more potent and more enriched. And that's one of the reasons they're looking for these are sort of the reactors that you could make micro reactors out of for, let's say, military purposes. And you can make small modular reactors and that store energy and heat. So there's really interesting varieties of designs out there. And they all come under the umbrella of advanced. They kind of use more advanced technology around the coolant and how the reactor operates. Peter. You mentioned one of your main suppliers is a Russian supplier, right? With the update that's going on of the banning of Russian uranium, enriched uranium, what does that do for your process? Yeah. So the Russian ban is—it depends how you look at it. It's a concern in the short term. The process has waivers. We've applied for waivers. The Department of Energy has allowed for waivers with the realization that the U.S., not only Centrus, but the U.S. utilities and the U.S. industry depends on the Russians in the short term. So in the short term, it provides, obviously, a concern for us that we need to manage. In the long term, it is absolutely the right thing for the American industry. We have depended on that supply for a long time. And just from my perspective as a CEO and as a Centrus employee, I would not want the Russians competing in the market when we become a producer in a few years. They tended to lower the markets and the price artificially for many, many years for the purpose of creating a dependency like we're seeing now. And so at least that's sort of my speculation on my behalf as to why that had happened. But suffice it to say that everybody tends to agree that there will be less downward pressure on the price if the Russians are not in the market. So, obviously, it is our preference that we will be in the market, and it would be easier for us to compete. So and unlocked a bunch of funding. There is over $3 billion worth of funding from the government to establish an American supply chain based on enrichment in the U.S. as part of that realization that we've depended on the Russians and we need our own supply. How does that $3 billion in incentives get deployed? I mean, is some of that going to you immediately, or do you have to apply for it, or what's that look like? I was hoping it will go to us immediately, but no, there's processes in the government around government procurement. And so, actually, the U.S. Department of Energy had issued two requests for proposals, which we've answered. One was for enrichment of HALEU. The other one is for deconversion of HALEU. And they are going to come out with another RFP, that's going to solicit proposals for the enrichment of LEU. So to answer your question, there's going to be three requests for proposals. We're going to answer. We answered all of them. We answered all the ones that are going to come out. And based on that, they will divide the money based on how you answered it. And what would be okay? Can you talk more about kind of the RFP process? And is there a commitment to ramp up manufacturing? Does that just go to make you kind of a more viable, more profitable company, or are there kind of strings attached that you have to do certain things by certain dates? Let me just explain the philosophy as to why the government is putting money into this field. I think that's important for everybody to understand. There is no precedent anywhere in the world. And such precedent will, I don't think, that scenario will ever come up where somebody is going to be able to build an enrichment facility just based on some kind of a business case without somebody stepping in and putting bridging the gap in funding. So all the enrichment facilities that exist now were built by governments, by states. And I think the U.S. government understands that, it would be nearly impossible for somebody to come in and self-fund it based on just contracts that exist. So they have wisely decided that there will be a bridge there to close that gap. So that really is the mantra behind it. Now, how will it be doled out? What would be the nature of the contract? I mean, we're hearing rumors. We don't know anything for certain. That is at the discretion of the Department of Energy. I mean, I just don't know how valuable that would be to the team here. Sorry. Shaki, go ahead. I was going to say, I mean, does the potential change in administration, does that put any kind of timing element behind all of this? That's a good question. So, yeah, I think that there will be press to start doling out some money. That's just my feeling before there's a change in administration. But I got to say that from our perspective, whether it's Republicans or Democrats, we've seen great support across the aisle from I mean, we talked to everybody, and they all support it. So, to me, again, I'm agnostic about administrations. I think there'll be strong support for nuclear in the U.S. and expanding our program abroad, whether it's Biden or Trump. Right. Sorry. Shaki. Thank you. Thank you. So on the back end of this, my understanding is that the energy content of spent fuel is still pretty high in the, I don't know, 80% or something like that. Correct me if I'm wrong. But are there any efforts to use further that spent fuel, more of the 80% or however much energy that's left, one? And two, is your company in the place to deal with it, or is it someone else because you're focusing on something else? That's a good question. I actually spent a lot of time in that part of the world as well, meaning the, it's called the back end, the fuel back end. That is correct. For the audience here, we only have a minute and a half, so I'll be brief. Spent fuel has a tremendous amount of energy in it that some countries are able to recycle and incorporate it into their fresh fuel, predominantly the French. So they have what they call a closed fuel cycle, which is really a misnomer. It's not really closed, but it makes use of a lot of the spent fuel. The better question is, why hasn't anybody else adopted it? The reason why nobody else has adopted it is because it probably changes the price of the fuel by an order of magnitude. I mean, it's an expensive process to take spent fuel, which is highly radioactive, separate the plutonium out of it, and add it back into fresh fuel. I mean, all of this done in hot cells without people touching anything. It's it's an extremely expensive process. Now, will the government again, same as enrichment. I don't think there's an entity out there that can self-finance it. I don't think that will ever happen because we're talking about big, big money. So is Centrus in this business? No. I still think that the economics of it, that it's much, much cheaper to put fresh fuel into the reactor than recycle and put fresh fuel. But there's a lot of virtues to recycling around proliferations and things of that sort. But just from a pure economic standpoint, we've always taken the pure economic path, being Americans that we are. I just don't know that it will. I don't know that that will change. That's just my personal opinion. Good question. Okay. With that, we're out of time. We'll wrap. Amir, Kevin, thank you very much. Thank you, everybody. Thank you very much.